Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 80 - 99)

THURSDAY 1 MARCH 2001

MR DAVID MOORCROFT OBE, MR LEN HATTON, MR TERRY COLTON, MR SHAUN DAWSON AND MR SIMON EVANS

  80. I think the good thing about the Dome is that it was actually delivered on time. It is a rare thing for a major multi-million pound project to be delivered on time and within budget, but from what we know about big project management in the United Kingdom we are not massively skilled at getting them done on time and within budget. It seems to be a weakness in our core culture. It is probably something to do with liberal arts education at school, but there seems to be something wrong with the way in which we look at project management. I have no confidence individually or as a politician as to when Wembley might be delivered, even Sir Rodney is not certain because there are so many complexities. It is the same with Picketts Lock. You have almost the same issues. As a backstop, if it is really important to get the athletics (which I think it is) is there any room to manoeuvre with Manchester given that they will have a stadium ready, slightly late but ready, for the Commonwealth Games?
  (Mr Moorcroft) I really do not think there is. It was considered 28 months ago as an option but it is not a realistic one for a number of reasons, not least the fact that the contract with Manchester City has been done. I am sure Sport England would answer that better than I. Manchester City, the football club, expect to move in there post 2002 as their home. I do not think that is an issue. The focus now must be on delivering the World Athletics Championships in London, honouring that commitment, making it work spectacularly well, but also providing a strong legacy for the sport. You indicated that project management maybe is not our greatest skill, I think actually working well together—this is a reflection of British sport—possibly is not our greatest quality either. Maybe the situation we are in now reflects fairly poorly on British sport collectively. I think the challenge now is if we all agree that it is a great idea to bring major events to this country, and the World Athletics Championships is a major event, and we have got it, that we have to make sure we provide a stadium and we also provide value for money and that stadium provides a legacy beyond.

Chairman

  81. Can you just answer yes or no. Will Picketts Lock Stadium be open in good time for the World Athletics Championships in 2005?
  (Mr Moorcroft) The one word answer is yes. The extended answer—

  Chairman: I wanted a one word answer. Thank you.

Derek Wyatt

  82. Sometimes governments can do magical things. If Manchester City was to be relegated, given that they have only signed a lease to rent it, they do not own it, they also might be somewhat nervous. I just think there ought to be a backstop here. I guess my question to you is have you signed a contract for the World Championships to be in London or just to be in the United Kingdom?
  (Mr Moorcroft) It is to be in London. As a resident of Coventry I would be delighted if Manchester City were relegated. The contract is with London. The event should and will come to London. Reference was made before to Australia and whether governments should intervene or not. I actually do think this is a great opportunity for us to show in Britain what Australia did, which was at government, state level and regional level to make things happen.

  83. One of the recommendations we had in our report two years ago was that the Cabinet Office should get involved with the Commonwealth Games, which Ian McCartney has done. Perhaps there ought to be that same person in charge of all of this so that the lessons of Manchester can be learned for Wembley and for Picketts Lock. The problem with Ian McCartney is he has no budget so he has to go cap in hand to all the other Secretaries of State. We are back running around trying to get £50 million from here, £30 million from here. Would it not be better if there was a sporting infrastructure fund of two or three billion pounds? Is this not a weakness, that you are running around trying to get infrastructure bids from everybody else but there is not one single Government minister that you can target?
  (Mr Moorcroft) I think that would be a good idea. Similarly, I think it is a sensible idea that there is either a Cabinet Minister in charge of major events or possibly a different Minister for each major event. I think there are a number of different options. It certainly would make life easier for us. I think it comes back to the debate about how much should there be Government interference. If we assume that Lottery money is effectively public money and that there are certain major events and projects, like Wembley and the Lee Valley Centre projects, that are of such magnitude that an appropriate relationship between Government and the statutory bodies and governing bodies is absolutely appropriate, I think that would be the right way forward. At the moment there are many agencies involved all with a slightly different remit, some of them with constraints, like Sport England because of the Act of Parliament. It lacks that real leadership to make it happen. I believe the Australian model has shown that if you have that leadership, and it has to come from the very top, then these events can be hugely successful. I think both the Secretary of State and the Minister have done their level best to give that leadership with the constraints that they have at the moment of being relatively hands off.

  84. Let us just say that you get this hiccough, as Wembley has had, of 19 months of irritation, perhaps from the Government, perhaps not, but irritation nonetheless with complexities of contracts and regulation and objections to planning and so on, if it is not feasible to put the platform into Wembley is it feasible to put it into Twickenham?
  (Mr Moorcroft) I really do not think there is a plan B. By far the best option and the most deliverable, and Sir Rodney talked about certainty, is the Lee Valley project. Remember the Lee Valley project is more than just a stadium, it is a centre with an indoor facility, a permanent outdoor track, a throws field, that has massive community benefit. That project has a greater degree of certainty and that is the one that we should focus on. Two-thirds of the funding is already in place notionally, so the pot is two-thirds full. I think it really does just require the willingness and the collective desire to make it work. I think it is a huge challenge to us all to make it work and work well, and a massive challenge to the sport to make sure there is a real legacy beyond the World Athletics Championships.

  85. We wish you well.
  (Mr Moorcroft) Thank you.

  Chairman: I love this Committee in every way but each member has got a very strange interpretation of the words "last" and "final".

Ms Ward

  86. I will try to bear that in mind. You just said, Mr Moorcroft, that two-thirds of the money is in place, that is two-thirds of the £95 million that it is expected to cost for Picketts Lock, is that right?
  (Mr Moorcroft) It is not an absolute commitment because a large amount of that money comes through Sport England and the Lottery and clearly there is a process that is involved there. If we assume that the £20 million will be returned from Wembley, there are indications that there is £40 million of Lottery money available, £7 million already allocated in terms of the UK high performance infrastructure and then there is £5 million that has been allocated by Lee Valley Regional Authority, and that takes it to £72 million.

  87. Where is the rest going to come from?
  (Mr Moorcroft) That is the challenge.

  88. It is quite a challenge.
  (Mr Moorcroft) It is less of a challenge than maybe other projects that we have discussed today, but it is still a challenge. We are involved in discussions with the commercial sector, obviously through the Secretary of State, sums of other public funding and in terms of European funding. As each week has gone by the gap has narrowed rather than been extended.

  89. Remind me again what the comparison of cost is between this project and the platform solution at Wembley?
  (Mr Moorcroft) There are different interpretations of that. £30 million was referred to today, I think it would have been more than that because £30 million was about the construction of the platform and Wembley was discussing issues to do with compensation, compensation for loss of revenue whilst the platform was constructed and then as the platform was being dismantled. There is also the proportion of the £120 million that had gone into the project initially because of the concept of it being more than just a football stadium. If we assume that is £20 million that is coming back out, plus the fact the World Athletics Championships and, indeed, the Olympic Games would require a significant warm-up facility, if that was going to go adjacent to the stadium that requires compulsory purchase of land. So the actual capital investment, should the World Athletics Championships or the Olympics had gone to Wembley, would have been massive. Maybe not £95 but not a million miles away from it. The advantage would have been the kudos of Wembley. The world would have been very happy that they had come to Wembley and been at the World Athletics Championships or Olympic Games. The loss to this country would have been that we would have had very little after that.

  90. Looking at this from the perspective of somebody in my constituency who would think we have had a solution put forward from Wembley which was at a cost, taking into account all the things you have just mentioned, of probably less than £95 million and we now have an option that is for a separate stadium of around £95 million capital investment, some concern over where you are going to get the revenue for that in the longer term and where transport access, public access, is significantly more difficult for Picketts Lock than for Wembley Stadium, can you explain then where the great advantage is and how this can be sold to people?
  (Mr Moorcroft) I will pass on to one of my colleagues in terms of transport. I do not think there will be a huge difference in terms of the capital investment. I think there will be a significant difference in terms of the legacy. It is a word that we use often. Wembley had certain advantages but as things stood it was very unlikely that there would be significant athletics, certainly in the main stadium, beyond the World Athletics Championships. The opportunity we have got with the Lee Valley project is that we have got a permanent legacy for athletics and a significant legacy. It means significant events in the stadium but also significant usage of all of the facilities. The 200 metre indoor track will be a revelation in the South of England in terms of it does not exist at the moment. That part of London is the most fertile area in terms of athletics talent, both at the very young age but also in terms of our senior internationals. It provides a wonderful opportunity for us to develop the sport. Beyond the World Athletics Championships there will be something permanent and very, very effective. That has not happened at other major games. For other reasons, the facility tends not to have great use. Could I invite either Simon or Shaun to make reference to transport?
  (Mr Evans) I was going to talk about the capital costs point. I think it is important to bear in mind that those pre-feasibility study costings were very provisional and not based on any architectural design work. Even as we go into the conceptual design work we are seeking significant areas of saving and we are starting to move already. The quantity surveyor was only appointed two weeks ago, so really there is a great deal of work to be done in terms of honing what those costs are in terms of the stadium design element itself. I think in relation to transport it is important to note that those costings did not include any off-site transportation or infrastructure improvements, and as we go through the transportation impact assessment study we are in parallel to that seeking and negotiating with other possible sources of funding for the transport infrastructure, but it is fair to say that that would be an additional consideration. Again, it is far too early to judge what those capital cost implications might be at this stage.

  91. That is a rather worrying comment you have just made. You are not sure what the capital costs are and you cannot judge what those costs are at this stage. Clearly the decision for Picketts Lock must have been made upon consideration of what the capital costs are for this and the legacy in comparison to what the alternative is.
  (Mr Evans) Our timescale for that is that those figures will become much clearer than the provisional figures we have been working on so far by May this year. It is not that far off but the timing is not good from the point of view of the question you ask.
  (Mr Moorcroft) The indications are (because the current design team obviously have quantity surveyors working on it) that the costs are likely to be less than the original worst-case scenario.

  92. And how are you going to continue to fund this? It is great to have a legacy but a stadium that cannot be run because of the cost issues in the future is no good to anybody. It may be fine for one championship or perhaps a bid, but apart from those bids if we have not got the money to fund it on a long-term basis it is not a very good use of not just public funds but indeed of anybody's funds.

  (Mr Moorcroft) It is true to say that the stadia for athletics do not run at a profit. There is no way, unlike a football stadium, that an athletics stadium can be filled regularly enough for it to be commercially viable, so there is a deficit, but that deficit is the cost of providing that facility and that has to be met from a number of different sources. The Lee Valley Regional Park Authority, Borough of Enfield, have indicated that they will be making contributions to the revenue. One crucial thing in our discussions at the moment is the potential relationship with the London Marathon Trust. They have indicated a desire to be involved possibly in the project vehicle that manages the centre and to be investing into the project because of the benefits to the community that it provides, and that discussion is crucial to the project. It is again quite uniquely London because of the great success that the London Marathon is, and one of their remits is to put money back into and invest in grass roots athletics. Their desire to be involved in this project is because of what that project can deliver beyond the World Athletics Championships. It is also true to say that we will be involved with the London Marathon because of the off-site off-track events that take place at the World Athletics Championships. One of the unique things about this relationship is having a potential partner like the London Marathon. What we have identified through the work of Ernst & Young is the likely scenario in terms of what that cost will be and therefore how valuable will be the revenue contribution that others make so we can deliver what we want.

Mr Fearn

  93. Who will underwrite the 2005 Games and bear any financial losses, if there are any—I am sure there might be—if you are not to use further Lottery grant?
  (Mr Moorcroft) It is far more appropriate that either the Secretary of State or the Minister answers this question because the assurances we have are from them and through the DCMS. Sport England have indicated—and it is an indication—that there is a budget of up to £15 million for running the event which is a very conservative budget. It is a challenge to the event to run within that budget. It is normal that the local authority is the third partner which therefore underwrites it and Birmingham are the underwriters for 2003. What the Secretary of State has assured us is that there will be an under-writing of that contract and he will take the lead in terms of ensuring that that is in place sooner rather than later.

  94. In other words, the Government will find the money if there is a loss?
  (Mr Moorcroft) The Government have accepted the responsibility to find that third party. The challenge is to ensure it does not run at a loss but you are very right there does need to be that third signatory.

Chairman

  95. You ought to be a Minister with the language you have just used!
  (Mr Moorcroft) It actually comes back to the debate of do we want events of this magnitude in this country and if we do then there is a cost. We have got to try and produce great value for that cost. I believe that there has to be a relationship between the events and the Government, and I think it reflects the new reality of sport and the public's belief that the Government and the various statutory bodies are the guardians of Lottery money, and therefore I think the Government should and does want to be pivotal in this process.

Mr Fearn

  96. There could be many calls like that on the cultural side. We cannot just think of this one area of sport, although I am very interested in that. Crystal Palace had a feasibility plan already in place. Your feasibility plan, from what I hear, is still not in place. Am I right about that?
  (Mr Moorcroft) The feasibility process continues until planning permission is given and the funding is in place. That process is on-going. There are a number of feasibility studies already done and that will continue right through until work starts on site. It is more appropriate that Sport England answers questions on the future of Crystal Palace but Crystal Palace was one of the sites that was considered when a number of agencies considered appropriate sites for the World Athletics Championships and Lee Valley was chosen.

  97. Will that still be a place where major events are held or will they all transfer once we get this super stadium?
  (Mr Moorcroft) From the athletics point of view the major London events would transfer to the Lee Valley Stadium. Again the future of Crystal Palace is much more to do with Sport England. Our preference is Crystal Palace which has a significant presence with athletics, both outdoor and indoor, because it is a significant south-of-the-Thames site and that is what we would prefer to see continued. In terms of major events the major events would be at the Lee Valley Stadium.

  98. In answer to the Chairman when he asked whether it was yes or no whether Picketts Lock would be ready or not, you said yes. I feel because the feasibility studies may go on and on and on that maybe the answer could be a probable and you nearly came in with that after the Chairman asked, "Is that yes or no", you said, "Yes, but . . ." and the Chairman would not allow anything else. I think I would like to hear what the buts were.

  (Mr Moorcroft) The "but" is "if we want it to happen".

  99. Who is "we"?
  (Mr Moorcroft) Collectively, all the various agencies that are involved in this project. I think there is a real degree of certainty that it can and will be built and will be ready. Everything we have tried to achieve is currently on schedule. I will bring Shaun in in terms of that. Clearly if there was not a willingness to make it happen then enough obstacles could be put in place to make sure it does not, and I think it is a test of British sport, not on the basis of building it for the sake of it, but building it because it is the right thing to do.


 
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